general atomics' response to intervenors' motion to compel ... · fuels, cli-94-12, 40...
TRANSCRIPT
UNITED STATES OF AMERICA " uv-NUCLEAR REGULATORY COMMISSION
ATOMIC SAFETY AND LICENSING BOARD 0O0'
In the Matter of )
),SEQUOYAH FUELS CORPORATION ) Docket No. 40-8027-EAand GENERAL ATOMICS
)(Gore, Oklahoma Site ) August 11, 1995Decommissioning Funding)
GENERAL ATOMICS' RESPONSE TO INTERVENORS'
MOTION TO COMPEL ANSWERS TO INTERROGATORIES
Pursuant to the Atomic Safety and Licensing Board's
("Licensing Board") Order dated August 8, 1995, General Atomics
respectfully submits this response to the Motion to Compel Answers
to Interrogatories ("Motion to Compel") submitted by Native
Americans For a Clean Environment ("NACE") and the Cherokee Nation
(together, the "Intervenors") on July 28, 1995.
SUMMARY
This matter comes before the Licensing Board on the
Intervenors' motion seeking an expedited resolution of certain
disputes that have arisen concerning the discovery sought by
Intervenors from both General Atomics and the Sequoyah Fuels
Corporation ("SFC").1 A fundamental dispute is that the
Although NACE and the Cherokee Nation were admitted asparties to this proceeding in March and July of 1994,respectively, the Intervenors did not initiate theirdiscovery efforts until July 10, 1995. Notably, discovery inthis phase of this proceeding closes on September 15, 1995,and timely discovery must be filed or noticed by August 18,1995. Having sat on their rights for more than a year, theIntervenors now seek expedited resolution of their discoverydisputes within the limited time constraints that are oftheir own making.
sFC. - oLý--
Ic-/y)7y
Intervenors seek discovery regarding a jurisdictional theory that
goes beyond the explicit or implicit legal or factual predicates
to the October 15, 1993 Order that is the subject of this
proceeding (hereafter, "1993 Order").
In summary, the Intervenors have cast a wide net with their
discovery requests and are attempting to launch a "fishing
expedition" in search of factual support for their alternative
theory of NRC jurisdiction based upon allegations of fraud,
illegality or other improper conduct by General Atomics, e.cr.,
"wrongdoing." See 10 C.F.R. Part 2, Appendix C, § X (1994); NRC
Enforcement Policy, 60 Fed. Reg. 34381, 34397 (June 30, 1995).
Specifically, the Intervenors are searching for a factual basis
for their theory that General Atomics engaged in wrongdoing at the
time that its subsidiary, Sequoyah Fuels Holding Corporation,
acquired the stock of SFC and obtained NRC approval for the
transfer of control of the Sequoyah License. However, the NRC
Staff has repeatedly explained that the factual and legal
predicates to the 1993 Order at issue in this proceeding do not
include any allegation of wrongdoing. 2 In fact, the 1993 Order
contains no hint of wrongdoing on the part of General Atomics, nor
any allegation of impropriety of any kind associated with NRC's
1988 approval of the acquisition of SFC. Therefore, the
2 See, e.g., Transcript of Prehearing Conference at 106 (Jan.19, 1994); "NRC Staff's Answer in Opposition to GeneralAtomic's Motion For Summary Disposition or For an Order ofDismissal" at 13 (April 13, 1994); Transcript of May 31, 1995Hearing at 252, 254-56.
- 2 -
Intervenors are impermissibly seeking discovery as to matters that
are beyond the scope of this proceeding, and General Atomics'
objections to specific discovery requests on this ground, as well
as on other grounds, must be sustained.
ARGUMENT
I. INTERROGATORIES SEEKING INFORMATION IN SUPPORT OF
INTERVENORS' WRONGDOING THEORY ARE IMPROPER.
As set forth in Section VIII of the 1993 Order, the issue in
this proceeding is whether the 1993 Order should be sustained.
The Licensing Board's "authority pursuant to this directive is to
consider 'whether the facts in the order are true and whether the
remedy selected is supported by those facts.'" Oncology Servs.
Corp. (Order Suspending Byproduct Material License
No. 37-28540-01), LBP-94-2, 39 NRC 11, 29 (1994) (quoting Boston
Edison Co. (Pilgrim Nuclear Power Station), CLI-82-16, 16 NRC 44,
45 (1982), aff'd, Bellotti v. NRC, 725 F.2d 1380 (D.C. Cir.
1983)). As a Licensing Board has noted elsewhere:
The bases asserted in an enforcement orderthus do provide the principal framework forthe proceeding. As a consequence, any legalor factual issue a party wants to propose inchallenging (or supporting) an enforcementorder must bear some relationship to thosebases by tending to establish, either aloneor with other issues, that some explicit orimplicit legal or factual predicate to theorder should not (or should) be sustained.
Dr. James E. Bauer (Order Prohibiting Involvement in NRC-Licensed
Activities), LBP-94-40, 40 NRC 323, 336 n.7 (1994) (emphasis
added).
- 3 -
The 1993 Order is neither explicitly nor implicitly
predicated upon any allegation of fact suggesting wrongdoing by
General Atomics or SFC, or any impropriety associated with the
NRC's approval of the transfer of control. To the contrary, the
NRC Staff has stated on numerous occasions that it is not
alleging any wrongdoing. Facts relating to these matters are
simply not implicated by the 1993 Order and are not in issue.
Thus, the discovery sought by the Intervenors is not relevant to
any factual or legal predicate to the 1993 Order, and is not
authorized. Notably, when the Commission affirmed the granting
of the Intervenors' petition to intervene in this very
proceeding, it clearly contemplated that the intervention would
be limited to "participation in a hearing on contested matters
that are within the scope of the enforcement action originally
brought by the NRC Staff." Sequoyah Fuels Corporation and
General Atomics (Decontamination and Decommissioning), CLI-94-12,
40 NRC 64, 71 (1994) (emphasis added).
Nevertheless, the Intervenors assert that their requested
discovery should be permitted because their contention regarding
NRC jurisdiction over General Atomics "specifically raised the
question of whether [General Atomics] knew of the extensive
contamination of the SFC site and intentionally shielded itself
from liability in order to frustrate the NRC's purpose of
protecting the public health and safety." Motion to Compel at 9.
In proffering this argument, the Intervenors controvert the very
assurances they made to the Commission in arguing that they
- 4 -
should be permitted to intervene in this proceeding. 3 As the
Commission specifically noted, NACE had recognized that in this
instance "it may only intervene with respect to matters found to
be within the scope of the Staff's enforcement order and may not
expand the breadth of the order or the proceeding." Sequoyah
Fuels, CLI-94-12, 40 NRC at 70. Curiously, the Intervenors have
admitted that "it has been true from the beginning of this case
that the 1993 Order does not claim wrongdoing by GA," but
nevertheless have asserted that they should be permitted
discovery in their attempt to find a basis for such a claim.
"[NACE's] and Cherokee Nation's Opposition to General Atomics'
Motion for Summary Disposition, to Strike Language from the
October 15, 1993 Order, and to Limit Issues in the Proceeding,"
at 5 (June 12, 1995) (hereafter, "Intervenors' June 12
Opposition") (emphasis added). Such discovery is not reasonably
calculated to lead to the discovery of relevant evidence that
would be admissible within the scope of the existing proceeding,
and it therefore is not permissible.
3 The Intervenors have repeatedly acknowledged that they cannotbroaden the issues in the proceeding beyond the scope of theOrder. See, e.g., "[NACE's] Request For Extension of TimeFor filing Contentions As of Right and Request For ExpeditedConsideration," at 2 (Dec. 30, 1993); "[NACE's] Reply to[SFC's] Answer in Opposition to NACE's Motion to Intervene,"at 9, 26 (Dec. 30, 1993); "[NACE's] Reply Brief RegardingAppropriateness of Commission Review of LBP-94-5 and WhetherRuling in Section II.A Should Be Sustained," at 2, 7-8 (March17, 1994); "[NACE's] Brief in Opposition to [SFC's] Appeal ofLBP-94-5 and LBP-94-8," at 28 (April 29, 1994).
- 5 -
Moreover, the Intervenors' eleventh-hour discovery requests
in this proceeding defy the very purpose of the Licensing Board's
June 30, 1995 scheduling order, which bifurcated this proceeding
in order to resolve the jurisdictional issue, once and for all,
based upon the NRC Staff's theory that General Atomics is a "de
facto licensee." See LBP-92-12, 41 NRC 475, (slip op. at 6-
8, 18-20). The Board's June 30, 1995 Order limited discovery to
this narrow issue and set an aggressive schedule for resolving
the issue of NRC's regulatory jurisdiction to impose liability
upon General Atomics. Id.
In their June 12, 1995 pleading, Intervenors have suggested
that, based upon the statements of this Board in another context,
the NRC Staff might be permitted to develop and introduce
additional facts and theories as a result of the discovery
process. Intervenors' June 12 Opposition at 5. General Atomics
strongly disagrees with the basic premise that the NRC Staff
might introduce facts or theories that are not within the scope
of the original 1993 Order. However, this issue is not now
before the Licensing Board. What is clear, is that even if the
NRC Staff had the discretion to expand the scope of the 1993
Order, the decision as to whether or not to take such action is
within the NRC Staff's enforcement discretion. By the same token
that Intervenors cannot force the NRC Staff to initiate
enforcement action based upon allegations of wrongdoing, e.g.,
Bellotti, 725 F.2d 1380, the Intervenors cannot force the NRC
Staff to expand its enforcement action to include allegations of
wrongdoing. Assuredly, the Intervenors cannot be permitted to
- 6 -
engage in a fishing expedition to seek facts outside the legal or
factual predicates of the 1993 Order in order to seek such an
expansion.
Thus, the Intervenors' motion to compel answers to
Interrogatory Nos. 19 and 20 to General Atomics should be denied.
II. EVENTS OCCURRING AFTER THE ISSUANCE OF THE 1993 ORDER ARE
IRRELEVANT TO THE THEORIES OF JURISDICTION AT ISSUE.
Facts and/or events occurring after October 15, 1993, are
not relevant to the subject matter of this proceeding and cannot
be reasonably calculated to lead to the discovery of evidence
that would be admissible in this proceeding. The issue in this
proceeding is whether the order issued to General Atomics and SFC
on October 15, 1993 should be sustained, and the scope of this
proceeding is limited "to a determination of the sufficiency of
the legal and factual predicates outlined in the order as of the
time the order was issued." Oncology Services Corp. (Order
Suspending Byproduct Material License), LBP-94-2, 39 NRC 11, 26 &
n.ll (1994). See also Advanced Medical Systems (One Factory
Row, Geneva, Ohio), LBP-90-17, 31 NRC 540, 542-43 n.5, 556-57
(1990). Information relating to events which took place after
the 1993 Order was issued could not have formed the basis for the
Order and can not bear a reasonable relationship to the factual
or legal predicates to the Order.
The Intervenors attempt to distinguish Oncology and
Advanced Medical Systems based upon three frivolous arguments.
First, Intervenors suggest that these two cases narrowly involve
specific past violations or practices, whereas the Order at issue
- 7 -
in this case is intended to impose liability "now and in the
future." This argument focuses only upon the remedy sought in
the Order, and ignores the fact that the 1993 Order is itself
predicated upon specific facts involving actions taken prior to
October 15, 1993. Moreover, Intervenors' suggestion that
liability for decommissioning funding in the 1993 Order involves
ongoing responsibilities that are distinguishable from other
enforcement orders has no foundation in reality. Enforcement
orders can often impose ongoing licensing obligations, and facts
may change over time that might alter an assessment of an order,
if one were writing on a clean slate. In fact, this was the very
situation faced by the Board in Oncology, which was asked to
consider corrective actions taken subsequent to issuance of the
Order. However, in Oncology the Licensing Board properly
recognized that orders are to be examined based upon the facts
extant at the time of issuance. This sensible approach is not
only circumscribed by the Licensing Board's authority based upon
the limited scope of proceedings, but from a practical
perspective, it eliminates the potential that Licensing Boards
would be faced with evidentiary questions that become a moving
target and thereby hinder resolution of proceedings.
In their second argument, the Intervenors similarly contend
that the 1993 Order is somehow unique because it involves an
"ongoing relationship between the NRC and the respondent." The
Intervenors suggest that "time-based evidentiary limitations" do
not apply to the issue of jurisdiction. However, there is no
rational basis for this strained distinction. It is nonsensical
- 8 -
to suggest that a Licensing Board could conclude that the NRC did
not have jurisdiction on October 15, 1993, but somehow the Order
may be sustained because the NRC subsequently acquired
jurisdiction. Certainly, the Licensing Board would not be
amenable to the converse as an outcome.
In their third argument, Intervenors suggest that somehow
discovery of facts relating to events occurring after the Order
was issued will assist them in assessing events that occurred
prior to October 15, 1993. This specious argument is simply not
credible. Evidence regarding SFC's current relationship with its
parent companies can neither prove nor disprove whether a
relationship that established NRC jurisdiction was in existence
during the relevant time frame before issuance of the Order.
Moreover, in the absence of a rational cut-off date, the duty to
supplement discovery responses would make discovery in this case
entirely unmanageable. An ongoing reporting obligation regarding
the operations of General Atomics and the Sequoyah companies
would not only be unnecessarily burdensome, but would serve no
meaningful purpose that bears any relationship to the issues in
this proceeding. The Intervenors should not be permitted to
impose such wide-ranging obligations under the guise of
conducting discovery.
III. THE SELECTION OF DOCUMENTS BY GENERAL ATOMICS AND ITSCOUNSEL FOR USE IN ANSWERING THE INTERROGATORIES ISNON-DISCOVERABLE WORK-PRODUCT.
Interrogatory No. 18 sought identification of documents
"relied on" by General Atomics in answering the Interrogatories.
General Atomics objected, in part, on the ground that the
- 9 -
interrogatory sought disclosure of the mental impressions,
conclusions, opinions or legal theories of counsel, which are not
subject to discovery. The Intervenors, citing no authority,
simply assert that the request is "reasonable" and should be
allowed. Intervenors thus fail to address the specific objection
at all.
That discovery cannot be had of the mental impressions,
conclusions, opinions or legal theories is expressly recognized in
10 C.F.R. § 2.704(b) (2),4 which represents a partial codification
of the common law protection of litigation work product. See
Hickman v. Taylor, 329 U.S. 495, 67 S.Ct. 385, 91 L.Ed.2d 451
(1947) (describing the doctrine protecting the mental thought
processes as well as tangible work product prepared for purposes
of litigation from discovery). Moreover, it is well established
under the parallel provision of the Federal Rules of Civil
Procedure, Fed.R.Civ.P. 26(b)(3), as well as the common law
concerning work product, that the selection by counsel of relevant
documents from the universe of available evidence is itself work-
product protected from discovery. See Shelton v. American Motors
Corp., 805 F.2d 1323, 1329 (8th Cir. 1986) (the "mental selective
4 Section 2.704(b) (2) provides that the "discovery ofdocuments" that are "prepared in anticipation of or for thehearing by or for another party's representative" may be hadonly under certain extraordinary circumstances. Moreover,even if documents are discoverable, "the presiding officershall protect against disclosure of the mental impressions,conclusions, opinions, or legal theories of an attorney orother representative." Thus, the mental work product ofattorneys or other representatives are entitled to absoluteprotection.
- 10 -
process reflects [counsel's] legal theories and thought processes,
which are protected as work product"); Spork v. Peil, 759 F.2d
312, 316 (3d Cir. 1985) ("the selection and compilation of
documents by counsel in this case in preparation for pretrial
discovery" is protected opinion work product), cert. denied, 106
S.Ct. 232 (1985).
Indeed, the U.S. Supreme Court has recognized that
[p]roper preparation of a client's casedemands that he assemble information, siftwheat he considers to be the relevant from theirrelevant facts, prepare his legal theoriesand plan his strategy without undue andneedless interference.
Hickman, 67 S.Ct. at 393.
It makes no difference, moreover, whether the selection of
documents was by General Atomics' personnel or by its counsel,
because client work product is as much entitled to protection as
attorney work product. See Advisory Committee Note to Rule
26(b) (3), 48 F.R.D. 487, 502.
Interrogatory No. 18 on its face intrudes into the protected
area. It directly seeks the identification of those documents
culled by General Atomics and its counsel from the available
universe of documents for the purpose of answering the
Interrogatories. The fruit of that selection discloses the
opinion of General Atomics and its counsel as to what documents
are of particular relevance to the area of inquiry. That assembly
and sifting of documents is work product, and should be protected.
- 11 -
IV. GENERAL ATOMICS' RELATIONSHIP WITH "SFC-MD" HASBEEN ADEQUATELY DISCLOSED.
Interrogatory Nos. 22 and 23 demand information concerning
General Atomics' role in the creation of SFC-MD and as to General
Atomics' "corporate management relations" with SFC-MD. General
Atomics objected to these interrogatories on the grounds that they
are irrelevant and vague. However, regardless of the objections,
General Atomics believes that it has adequately answered these
interrogatories. SFC-MD was organized by the company that sold
SFC to a subsidiary of General Atomics -- i.e., General Atomics
had no role in its establishment. General Atomics' relationship
with SFC-MD was merely derivative of General Atomics' relationship
with SFC -- i.e., SFC-MD was an unincorporated division of SFC,
which is a wholly-owned subsidiary of Sequoyah Fuels International
Corporation, which is a wholly-owned subsidiary of Sequoyah
Holding Corporation, which is a wholly-owned subsidiary of General
Atomics. This information has been provided to the Intervenors,
and adequately answers the two interrogatories. 5
5 The Intervenors contend that the "American BusinessDirectory" lists Neal Blue as "CEO" of SFC-MD. Regardless ofwhat the Directory lists, Neal Blue simply was not "CEO" ofSFC-MD. The Intervenors' basis for inquiry into the area,therefore, is not "sound" as asserted, but rather simplyincorrect.
- 12 -
V. THE RELATIONSHIP BETWEEN GENERAL ATOMICS AND TENAYA,GAES, GAESLP, AND GATC HAS NO BEARING ON ANY ISSUE INTHIS CASE.
Interrogatory No. 31 sought discovery of the corporate
relationships between General Atomics and several other entities,
including Tenaya Corporation ("Tenaya"), General Atomics Energy
Services ("GAES"), General Atomics Energy Service Limited
Corporation ("GAESLP"), and General Atomics Technologies
Corporation ("GATC"). General Atomics objected to the portion of
the interrogatory concerning these entities on the ground that
discovery of the relationship between private corporate entities
which are not parties and which do not fall within the corporate
structure between General Atomics and SFC is not relevant to any
issue in the case.
The Intervenors' only specific argument in support of this
interrogatory provides telling evidence of the Intervenors'
refusal to honor any boundaries in this case. The Intervenors
argue that this interrogatory might lead "to the discovery of
evidence as to whether General Atomics controls SFC through its
parent (Tenaya) or subsidiaries" -- i.e., the Intervenors are
arguing that they should be allowed to engage in a fishing
expedition to seek evidence that might bear upon an indirect
control theory. However, a theory of indirect control has no
factual support, and is not supported by any contentions in the
1993 Order. Moreover, the interrogatory as framed would not even
obtain the evidence of control upon which it is purported to be
justified. It seeks to discover the relationship between General
Atomics, not SFC, with each entity.
- 13 -
Interrogatory No. 31 seeks evidence well outside the
boundaries of this case. Even the Intervenors' own justification
for the interrogatory is founded on speculation and conjecture,
and would not be served in any event by an answer. Interrogatory
No. 31 is improper, and General Atomics should not be required to
respond.
VI. INTERROGATORY NO. 32 IS SO VAGUE, BROAD AND OPEN-ENDEDAS TO BE IMPOSSIBLE TO ANSWER ABSENT GREAT EFFORT; HENCE, THEINTERROGATORY IS UNDULY BURDENSOME.
Interrogatory No. 32 seeks broadside discovery of essentially
every fact relating to any SFC "corporate standards, criteria, and
procedures related to the protection of health, safety, and the
environment at the SFC plant" that were "prepared or approved by
General Atomics." (Emphasis added.) The interrogatory demands,
for each standard, criteria and procedure an explanation (1) how
it was developed; (2) when it was developed; (3) how it was
applied (presumably by SFC); (4) when it was applied (presumably
by SFC); and (5) "in what way it is superior to or subordinate to
any other standards, criteria or procedures for the SFC facility."
The interrogatory simply asks too much. It seeks detailed
information about policies based on broad "related to" and
"approved by" standards that potentially would sweep up every SFC
policy General Atomics ever heard of, no matter how trivial.
Moreover, the interrogatory purports to require General Atomics to
make subjective judgments about each such policy.
Interrogatories function when they seek specific information
about a discrete topic. Interrogatories are not designed,
however, to give a party the opportunity to require another party
- 14 -
to write book-length treatises on a given topic. When an
interrogatory goes too far, it becomes unduly burdensome. The
value of the answer is outweighed by the difficulty and expense of
writing the book. See Anker v. G.P. Searle & Co., 126 F.R.D. 515,
518 (M.D.N.C. 1989) (court on motion to compel should weigh
relevance of discovery against burden on the other party); 8A C.
Wright, A. Miller, R. Marcus, Federal Practice and Procedure:
Civil § 2174 at 303 (2nd ed. 1994) ("interrogatories that require
a party to make extensive investigations, research, or compilation
or evaluation of data for the opposing party are in many
circumstances improper").
Interrogatory No. 32 is too general and broad, and General
Atomics' objection should be sustained.
CONCLUSION AND REQUEST FOR ORAL ARGUMENT
Intervenors' flaunting of the boundaries of this proceeding
should be curbed. General Atomics respectfully requests that the
Licensing Board deny the Intervenors' Motion to Compel.
Due to the potential importance of the issues involved in the
motion, General Atomics requests oral argument.
Stephen M. DuncanBradfute W. Davenport, Jr.Alan D. Wingfield
Mays & Valentine110 South Union StreetAlexandria, Virginia 22314(703) 519-8000
Counsel for General AtomicsAugust 11, 1995
- 15 -
m&v/hiadw/ 13292.001 /plead/ omnpelans
UNITED STATES OF AMERICANUCLEAR REGULATORY COMMISSION %
ATOMIC SAFETY AND LICENSING BOARD
In the Matter of )
SEQUOYAH FUELS CORPORATION ) Docket No. 40-8027-EAand GENERAL ATOMICS
)(Gore, Oklahoma Site ) August 11, 1995Decommissioning and Funding)
CERTIFICATE OF SERVICE
I hereby certify that a copy of the foregoing GeneralAtomics' Response to Intervenors' Motion to Compel Answers toInterrogatories was served on August 11, 1995, upon the followingpersons by deposit in the United States mail, first class postageprepaid and properly addressed, and to the persons marked with anasterisk (*) by telecopy:
Office of the Secretary *U.S. Nuclear Regulatory CommissionWashington, D.C. 20555Attention: Docketing & Service Branch(Original and two copies)
Office of Commission Appellate Adjudication *U.S. Nuclear Regulatory CommissionWashington, D.C. 20555
Administrative Judge James P. Gleason, Chairman *Atomic Safety and Licensing BoardU.S. Nuclear Regulatory CommissionWashington, D.C. 20555
Administrative Judge G. Paul Bollwerk, IIIAtomic Safety and Licensing BoardU.S. Nuclear Regulatory CommissionWashington, D.C. 20555
Administrative Judge Jerry R. KlineAtomic Safety and Licensing BoardU.S. Nuclear Regulatory CommissionWashington, D.C. 20555
Administrative Judge Thomas D. Murphy *Atomic Safety and Licensing BoardU.S. Nuclear Regulatory CommissionWashington, D.C. 20555
Steven R. Hom, Esquire *Susan L. Uttal, EsquireOffice of the General CounselU.S. Nuclear Regulatory CommissionWashington, D.C. 20555
Diane Curran, Esquire *c/o IEER6935 Laurel Avenue, Suite 204Takoma Park, Maryland 20912
Mr. Lance Hughes, DirectorNative Americans for a Clean EnvironmentPost Office Box 1671Tahlequah, Oklahoma 74465
John H. Ellis, PresidentSequoyah Fuels CorporationPost Office Box 610Gore, Oklahoma 74435
Maurice Axelrad, Esquire *Morgan, Lewis & Bockius1800 M Street, N.W.Washington, D.C. 20036
Mr. John R. DriscollGeneral Atomics3550 General Atomics CourtSan Diego, California 92121-1194
James Wilcoxen, Esquire *Post Office Box 357Muskogee, Oklahoma 74402-0357
Ms. Betty RobertsonHCR 68, Box 360Vian, Oklahoma 74962
Dated this August 11, 1995.
Mays & ValentinePost Office Box 1122Richmond, Virginia 23208(804) 697-1200
Counsel for General Atomics
-2-
mn&v/liadw/ 13292.001 /plead/cert